Painful Legacy

BankAmerica's bad days

He had raced upward through the ranks, never remaining in one job for more than two years. Then, in 1980, at the age of 41, Samuel Armacost was named chief executive of BankAmerica. "My first inclination was to jump and scream," he later recalled. No wonder: Armacost was about to begin managing the world's largest and most profitable financial firm.

Five years later, Armacost has lost some of that youthful exuberance. BankAmerica's earnings have steadily declined since he took charge, and last week the San Francisco-based financial giant (assets: $118.5 billion) said that it lost $337 million last year, its first...